The city of Cincinnati and SoMoLend announced last December that they had partnered to help area small businesses and entrepreneurs gain access to funding they needed to grow.

SoMoLend said at the time that it would identify businesses to which the city could loan up to $400,000 to stimulate economic growth and job creation. The partnership was approved by the city’s Small Business Advisory Committee and announced at a City Hall press conference.

Cincinnati spokeswoman Meg Olberding said Monday that the city had been considering using SoMoLend to facilitate three potential loans from economic development funds to small businesses. Those deals have been suspended pending the outcome of the state investigation by the Ohio Division of Securities, Olberding said.

The state alleges that SoMoLend officials have made fraudulent financial projections, false and misleading statements about the company’s current and past performances, and false statements about its relationships with banks and other finanical institutions.

Olberding declined to identify the three businesses that were in line for potential loans, or what amounts were being considered.

Cincinnati Councilman Christopher Smitherman said he was “not surprised that the financial relationship has blown up.”

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“This administration has a poor record of doing its due diligence around financial deals,” Smitherman said.

SoMoLend announced a similar partnership with CORE Hamilton, an economic development agency working to revive downtown Hamilton. That partnership included Fifth Third Bank and Downtown-based First Financial Bank, according to an announcement, also last December.

Fifth Third said Monday that it has no loans with SoMoLend and declined further comment. First Financial declined comment as well.

Hamilton CORE executive director Mike Dingeldein said his agency and the other partners never used SoMoLend due to concerns over meeting state regulations.

“We really like the concept, but we know that until the state laws are changed, we can’t use it... as we see today,” Dingeldein said.

According to the SoMoLend website, a major partner is the Columbus Chamber of Commerce. Chamber president and chief executive officer Michael Dalby said the arrangement called for the chamber to list SoMoLend as a potential lender on its site, but that he was unaware of any loans actually being made.

“The partnership will be suspended until we know more about this situation,” Dalby said in a statement.

SoMoLend also lists Cleveland-based KeyBank as a major partner of the company on its website.

“We are aware of the complaint” against SoMoLend, KeyBank spokesman Jack Sparks said in a statement. He said it would be inappropriate to comment further, citing the ongoing investigation. ⬛